Today, the Seattle City Council will vote on a resolution expressing concern about the Trans-Pacific Partnership trade agreement currently being negotiated, and the Seattle Times editorial board thinks that’s just plain silly:

The council’s ordinance sends a head-scratching message about the importance of trade. No American city, arguably, is more dependent on the import-export business than Seattle. The Port of Seattle is an engine of family-wage jobs. Overall, 30 percent of Washington’s exports — nearly $27 billion worth — went to countries participating in the TPP. Stronger U.S. trade ties with those 11 other countries would undoubtedly add to the total, especially in Japan, Malaysia, Vietnam and New Zealand.

Uh-huh. So, here’s the thing about “free trade” as defined by agreements like the TPP: it isn’t free. Sure, goods are free to cross borders, and financial capital is free to cross borders. And since goods-plus-capital equals jobs, the TPP frees more jobs to cross international borders.

But you know what’s not free to cross borders? Labor. And since jobs are mobile and labor isn’t, free trade agreements like TPP and NAFTA and all the rest end up distorting the economy in a way that advantages capital and disadvantages labor. I’m not making shit up here. The same neoclassical economic theories that argue for free trade will tell you that if capital is free but labor mobility remains constrained, then the labor market can never reach a state of natural equilibrium. Capital can (and will) arbitrage the price difference between various labor markets, artificially suppressing wages for all.*

Good for profits, not so good for workers.

Of course, that doesn’t mean we can’t have free trade. We could open our borders to all comers, and vice versa, allowing labor to move to where the good jobs are. We could actually allow the entire market to be free. But that’s not likely to happen. Or, we could all openly acknowledge that trade agreements disadvantage labor, and insist that they come with policies designed to ameliorate the harm and redistribute the profits more broadly. You know, if we actually gave a shit about workers.

But let’s not pretend that, on their own, free trade agreements are good for American workers. Because apart from those workers directly employed in import-export (and let’s be honest, mostly import), they’re not.

* Not to be construed as an actual endorsement of neoclassical economic theory.

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Comments

In the same vein of thought as that of ‘labor should be free to go where the highest wage is’ to achieve a truly free market; why does the legal system automatically assume that a farmer should pay for Monsanto seeds because the pollen migrated to the farmer’s fields and infected his crops?

Shouldn’t Monsanto be forced to pay for encroaching on someone else’s seed supply?

Just one more example of how the power elite and their shills (I’m looking at YOU, Seattle Times editorial board) regard America’s workers with utter contempt. I’m not against workers, as an ex-worker myself I’m 100% on their side, nor am I against work, it’s simply that I know a stacked deck when I see one. I made $4,131 in the stock market today, and did nothing to earn it, nor did I produce anything of any economic value, I merely own something called “stock shares.” Meanwhile people are vociferously debating whether $15 an hour is too much to pay workers in fast food restaurants, nursing homes, day cares, retail stores, etc. I hope you see the absurdity of this juxtaposition. And, yes, my capitalist profits rain down upon me from so-called “free trade” because it’s practically impossible to invest in companies that don’t get half their profits from foreign markets. There’s really no such thing as “American” companies anymore, because all business is multinational now, and these border-straddling corporations are superseding governments. They ARE the government, everywhere, now. That’s why American workers have no rights, the inhabitants of the Nigerian delta have no rights, no one anywhere has any rights. Only corporations have rights now. Even as a shareholder (aka “owner”) of 39 different corporations, I have no say in what they do; my only rights as a shareholder are to cash the dividend checks they rain down upon me. It’s a strange system, hard to make sense of, although I’ve figured out it’s sure as hell better to be a shareholder than an employee.

All I know is that the trade agreements we already signed haven’t done anything for American families but diminish their income. Not what we were promised! Why keep doing the same thing over and over when it doesn’t fucking work?

yet every single person commenting or writing on this site uses a device or cellphone or laptop, made in china or somewhere not the usa. and wears shirts, shoes, from abroad, too.

you don’t like trade? okay, i take it you don’t want boeing to trade. that will do wonders for our local economy.

it’s so easy and lazy to diatribe against trade. but before you do, tell me what kind of car you drive, where was your laptop made.

germany does fine with exports and trade. canada, too. I think we have had declining living standards because we in american are fucking up. the hundreds of millions of chinese who no longer starve in the countryside because now they work in factories making oh, the stick vaccum i got at best buy for twenty dollars!!!!!!! they deserve a better life, too. clearly their income went up. germany’s went up. canada’s went up. maybe we are just fucking up at managing our own economy.

oh wait of course we are what we let the min wage decline, we cut programs, we lowered taxes, etc. don’t blame the indians and the chinese for that!

I don’t think the Seattle Council nor any city council in Washington state should be wasting it’s time on passing any measure on TPP it’s the Federal Government bailiwick. If some members want to get together and send a letter to the President or the Presidents of Iran go for it! They aren’t going to take the step that would put some bite into their bitching which would be to close the port if the darned thing ever gets negotiated assuming it doesn’t fall apart first. The PTT is something we all should be talking to our Congressmen about, but you know it’s all about the Iran negotiations and the fact that a technically capable may build an atomic bomb. The fact is they have not done so. Like Japan if they have the nuclear material to build a bomb they can do so probably rapidly. We aren’t going to keep them from acquiring the material over the long run (nor is Israel). So we are stuck on what the current or future leadership decides to do. Overall it’s not going to affect many folks everyday lives, unless you like Persian rugs. This TPP will affect you, but unless the council is willing to follow words with action and close the port it’s all a waste of time. Rather like the Bellingham city council passing an anti war measure a decade ago and we are still involved in the war. They didn’t take a singe action against any armament company. It was just a feel good measure, rather like making everyone take off their shoes at airports and most of the TSA measures that keep me from the cool stuff inside airport terminals. Yeah the Denver airport was built to be a shopping mall but now you gotta have boarding pass. Maybe it was just to keep us little people out of Guichi’s.

@5 This wasn’t a diatribe against trade. Read it again. All I did was point out that if you allow goods and capital to freely trade across borders, but not labor, then you disadvantage labor. That’s simply how markets work. Therefore, if we’re going to have trade then we need to account for how we disadvantage labor.

@5 Chinese products are crap and I try to avoid buying them (by reading labels and shopping where I can get Made In USA or France or Germany or whatever). I once bought a Made-In-USA can opener for 79 cents that lasted for 20 years. When it finally wore out I bought similar-looking Made In China can opener for $3.99 that broke the third or fourth time I used it. So I bought another one and it broke within a week. So I want on the internet and found a Made-In-USA can opener for $14.99 and bought it. If it lasts more than a month, it’ll be cheaper than going through three or four $3.99 Chinese can openers in a month. Explain to me how I’m better off than I was when I could buy a Made In USA can opener for 79 cents and use it for 20 years.

folks, seriously. first goldy wrote ““Free Trade” Agreements Broadly Disadvantage American Workers, Because Markets!” that looks like a generic attack on trade to me — and he makes general points that trade without free movement of labor harms labor. well then, if that isn’t a general attack on trade I don’t know what is.

but here’s the point. Goldy, and also 9, 10 and 5 — I bet your are using a device made in china to make your points.

you are aren’t you. and if not that, you drive a toyota or a fiat. so you personally are labor that benefits from trade — just like the guy at the ARCO station who goes to macy’s to buy the toaster over on sale for $19. seriously, $19 fucking dollars. made in china.

here’s the other labor that trade benefits: the guy in the factory in china. oh yes, we’d find his life intolerable, what with our privilege. but he thinks it’s fucking AWESOME compared to his parents’ lives since they fucking STARVED or nearly did in the undeveloped countryside. so, there, two groups of labor benefitting from trade. here’s more:

Germany and Canada do quite well by trade. Boeing workers too.

now please understand, I think it’s assumed here anyway, any nation needs progressive taxes….free education including college….infrastructure……and vastly more training than we provide in the usa….also a much higher minimum wage, certainly $15 for sure…..and other regulations on capital and what not. but if we fail to enact them, don’t blame trade. don’t blame trade agreements. don’t blame republicans — they’re always against that crap and won’t change. nope, blame our own democratic party which for decades dropped the ball and let middle and working class income slide.

canada just surpassed us in median wealth. they trade more than we do. germany is more equitable, they have a national policy to WIN at trade. so your policy suggestion that we simply eliminate all borders, and let anyone move here, which is totally not realistic, is thus proven by these facts to not be necessary to do okay with trade. now as to trade pacts, I think you ahve to take them section by section. if the tpp does have that thing about investor expectations that was leaked, no way, that sucks, and it won’t pass, too. democrats will revolt. but the part about vietnam dropping a 10% tax on our apples?

goldy, what’s wrong with that? anything? if you favor that tariff, then don’t you favor any tariff, and that means then suddenly we get more of them trade contracts and suddenly boeing airplanes get a tariff on them! and our economy declines.

@11 — where was your laptop, desktop, cell phone and or tablet made?

many products are made better overseas but not all. a bad product from china will not be favored by consumers. I have tons of shit made in china and it’s fine. and frankly, if you give me a choice of a toaster oven for $18 and one for $60, and one lasts one third as long — frankly I don’t care I don’t keep them that long. but anyway, it’s kind of racist to be slamming an entire nation the way you do, sorry to say it but it is. and to think america will succeed by “recovering” the part of the market where we would be making fucking can openers and crap like that is idiotic. that’s not going to give us high worker incomes. what will give us high worker incomes is excelling in exports of high tech stuff including the software, the technology for the energy revolution, things like that. technology for high speed trains — oh shit, china is beating us on that, too, they already are getting export contracts.

you guys are thinking lamely. the world of the future is one in which lots of brown and yellow people — not just eurowhites — have money. the nation that succeeds in the future will succeed based on EXPORTS TO CHINA, BRAZIL AND INDIA. you’re not going to get there by thinking you can hide from global competition, or by doing the same thing in fancy words by suggesting “trade is bad, unless we remove all borders!” which is what goldy basically suggested. the way to go is more like germany — man up and fucking excel at trade and exports, then put some social democratic policies in place to assure the higher income is more fairly spread around. (yes, I know merkel isn’t SD but the institutions of germany are mainly those set up by the SDs).

but hey you guys want to pursue a policy of “we will make can openers” good luck with it. maybe we can make can openers and automobile floor mats too! great industrial policy you got there. you simply can’t succeed in the world today by NOT winning at trade. now, I told you how we win, you tell me how we win and don’t come back with this “well first of all everyone in the world must have a right to move to America” — that’s kind of delusional.

I object to local government giving folks a hand job and if they really are serious then where is the beef? Seems the Council will abide by the TPP if it passes. May have something to do with that oath of office they took to abide by the constitution and laws of the United States and Washington state. Other than closing the port what can they do if the TPP negotiations don’t fall apart.

There are two parts to change politics. First speech and then political action. Some guy named Martin Luther King put the theory into words and practice pretty well. I doubt the man would be cool with TPP, but only in the sense of the poverty crises in this country that existed then and exist now, He would tell you poor people have to go to Walmart and depend on buying crap from China, ect. Hell you can’t even buy an American made TV anymore. Most of us couldn’t afford it. Now Japan doesn’t build the tv, moved to where labor costs were less Korea or Singapore an now the Philippines and maybe next to Zaire chasing that cheap labor market, and then leaving town when it becomes to pricey and there is another market to go to.

And by the way the WWII pensioners who fought in the Patriotic War and the communists are the conservatives in Russia. Tell that to you Republican friends and ask if they are communists.

re 13: “…well then, if that isn’t a general attack on trade I don’t know what is.”

You’re right. You don’t know.

France and Germany have high tariffs on imports that compete with their manufactured goods. If the low quality Chinese-made goods were sold at more or less the same price as slave labor Chinese goods are, then the difference would be clear.

There is a moral aspect to production of goods that you don’t take into account.

Correction to #16 — France and Germany have high tariffs on imports that compete with their manufactured goods. If the low quality Chinese-made goods were sold at more or less the same price as the high quality European made goods are, then the difference would be clear.

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